Global Intelligence Briefing

Executive Summary

• Trade War Escalates: The United States imposed sweeping tariffs on March 4, triggering immediate retaliation from Canada and China. U.S. President Donald Trump’s 25% tariffs on imports from Canada and Mexico (and doubled duties on Chinese goods) sparked a global stock selloff, with the Nasdaq index falling into correction territoryreuters.comreuters.com. This marks the onset of a major trade war with America’s top trade partners, likely leading to prolonged economic turbulence and higher costs for businesses and consumers in coming weeks. Major U.S. retailers have warned of impending price hikes, and additional retaliatory measures (particularly from Mexico by this weekend) are likely.

• Ukraine Diplomacy and Security Risks: Geopolitical tensions remain high as Ukraine’s leadership pushes for a diplomatic end to the war with Russia amid signs of waning U.S. support. Ukrainian President Volodymyr Zelenskiy has called for intensified peace talks and security guarantees, emphasizing the need for U.S. backingreuters.com. This comes just days after a contentious meeting with Trump in which the U.S. president signaled impatience with the three-year-old conflictreuters.com. Western unity is holding for now, but it is likely to be tested; any U.S. pullback would almost certainly force Ukraine to seek a settlement on less favorable terms.

• Cybersecurity Threats Surge: A major cyberattack on Swiss manufacturing firm Adval Tech highlights rising cyber risks to global supply chains. The attack, carried out overnight March 1–2, forced an immediate worldwide IT shutdown at the company to contain damageecrime.ch, causing production disruptions across its plants. This incident underscores that ransomware and other cyber threats are highly likely to continue targeting critical industries. Other recent breaches – including an intrusion into Poland’s space agency IT networkecrime.ch – demonstrate the broad scope of targets. Commercial subscribers should anticipate further cyber incidents in the manufacturing and public sectors, and bolster their defenses accordingly.

• AI Governance in Flux: Policymakers signaled new directions in AI governance. In Europe, lawmakers objected as the EU withdrew a proposed AI Liability law, delaying stricter rules on AI accountabilitypymnts.com. In the U.S., the White House launched an AI Action Plan consultation, seeking public input on how to promote AI innovation while managing riskspymnts.com. These moves suggest that near-term regulatory burdens will likely remain limited, favoring a cautious approach. Companies should watch for policy shifts but can expect that any new AI regulations will unfold gradually, with moderate probability of sudden constraints in the next quarter.

• Global economic stability is at risk from escalating U.S.-China/North America trade disputes, likely causing market volatility and supply chain adjustments.
• The Ukraine conflict is entering a diplomatic phase, but continued U.S. engagement is uncertain – a factor that could reshape European security outcomes.
• Cyber threats to critical industries are surging; it is highly likely that adversaries will exploit any security gaps, necessitating proactive corporate cybersecurity measures.
• AI governance debates are ongoing; organizations should stay agile as policymakers balance innovation and risk, with incremental changes expected rather than abrupt regulation.

Traders on the floor of the New York Stock Exchange react to market volatility on March 4, 2025, after new U.S. tariffs took effectatlanticcouncil.org. Global markets dropped amid fears of a protracted trade war, illustrating the high impact of policy risks on financial stability.

Priority Intelligence

1. U.S. Trade War Triggers Economic Instability (Last 48 hours)

Headline: United States ignites a trade war with key partners (March 3–4, 2025), rattling global markets and raising recession fears.

Key Intelligence:

• Tariffs Implemented: Effective March 4, the U.S. imposed 25% tariffs on all imports from Canada and Mexico, and doubled tariffs on Chinese goods to 20%reuters.com. These measures affect roughly $2.2 trillion in annual trade, justified by Washington as retaliation for inadequate action on fentanyl traffickingreuters.com.
• Immediate Retaliation: Canada’s government “hit back” with 25% tariffs on C$30 billion (≈$21 billion) of U.S. goods, as Prime Minister Justin Trudeau condemned the U.S. move as “a very dumb thing to do”reuters.com. China responded immediately with new tariffs (10–15%) on certain U.S. imports starting March 10 and export restrictions on critical materialsreuters.com. Mexico’s president has vowed retaliation, to be detailed on March 9reuters.com.
• Market Fallout: The announcements sparked a global stock selloff. All major U.S. indices fell, with the Nasdaq entering correction territory after European markets saw their sharpest one-day drop in six monthsreuters.com. Investors shifted to safe-haven assets, driving U.S. 10-year Treasury yields to five-month lowsreuters.com. Companies in trade-sensitive sectors (manufacturing, retail) saw share prices drop and warned of consumer price increasesreuters.comreuters.com.
• Economic Warnings: Analysts note the tariffs could “slam economic growth” and worsen inflation for U.S. consumersreuters.com. Target and Best Buy have signaled that extended tariffs will force significant price hikes on goods in the coming weeksreuters.com. Business lobbies in all affected countries are urging negotiations to avert sustained damage.

Analysis:
The drivers behind this escalation include U.S. domestic political objectives and frustration over illicit fentanyl flows (the White House’s stated trigger)reuters.com. Trump’s administration appears motivated to project toughness on trade and crime, leveraging tariffs as a political tool. Alternative explanations suggest the timing – shortly after an election year – indicates the move is aimed at fulfilling campaign promises on trade, regardless of economic downside. In the short term, the trade war is likely to unsettle markets and disrupt North American supply chains; businesses will face higher input costs and logistical delays as new tariffs and counter-tariffs take effect. Longer-term risks include a potential global downturn if the dispute widens: protracted trade barriers could drive up inflation and depress investment (a likely outcome if no compromise is reached). There is also a risk of allied geopolitical friction – for example, Canada accusing the U.S. of using fentanyl as a pretext to “weaken the Canadian economy…toward annexation”reuters.com illustrates the level of diplomatic strain. An alternative hypothesis is that the U.S. may be using extreme tariffs as a negotiating gambit to extract drug-control concessions; however, given the scale of measures now active, both sides appear unlikely to back down quickly.

Implications:
For businesses, this trade conflict portends higher costs and supply shocks. Import-reliant industries (automotive, electronics, retail) will face rising prices (very likely) and may need to reroute supply chains or pass costs to consumers. Financial markets are likely to remain volatile – with a reasonable chance of further equity declines and currency fluctuations – until clear signs of resolution emerge. Policy-wise, central banks might confront a dilemma: tariffs can spur inflation even as growth slows, complicating interest rate decisions. Geopolitically, strained U.S.-allied relations could spill over into less cooperation in other domains (likely), such as coordinated sanctions or security initiatives. On the positive side, the intense economic pressure could eventually drive all parties to negotiations (an outcome that is possible within the next 1–2 months if economic pain mounts). Overall, the probability that this trade war persists through the quarter is highly likely (given entrenched positions), with a moderate probability that it further escalates (e.g., expanding tariffs to more sectors) if no dialogue occurs.

Recommendations:

• Diversify Supply Chains: Companies should immediately review sourcing strategies – identify alternative suppliers in unaffected countries or increase inventory of critical materials to buffer against tariff impacts. This may mitigate short-term disruptions. (Note: If trade policies shift unexpectedly, adjust orders and logistics accordingly.)
• Hedge and Monitor Markets: Financial and risk officers should consider hedging currency and commodity exposures influenced by this trade dispute. Closely monitor policy signals from upcoming U.S., Canadian, and Chinese trade briefings for any indication of compromise or further escalation.
• Engage in Policy Dialogue: Multinationals and industry groups are advised to liaise with trade officials and contribute to any negotiation frameworks (e.g., offering verification measures to combat fentanyl trafficking). Active corporate diplomacy could help de-escalate tensions.
• Contingency Planning: Prepare for worst-case scenarios (e.g., expansion of tariffs to additional countries or a prolonged standoff). This includes stress-testing financial plans under higher tariff costs and considering price adjustments. These plans should be revisited frequently, as probability assessments may change if diplomatic dynamics shift or if economic indicators worsen unexpectedly.

2. Ukraine War Diplomacy Intensifies Amid U.S. Uncertainty (Last 48 hours)

Headline: Ukraine presses for peace talks and security guarantees (March 3, 2025) as U.S. signals impatience, potentially reshaping the conflict’s trajectory.

Key Intelligence:

• Zelenskiy’s Diplomatic Push: Ukrainian President Zelenskiy on March 3 publicly committed to “intensive diplomacy” aimed at a rapid end to the war, now in its third yearreuters.com. He emphasized working “together with America and our European partners” and stressed hopes for U.S. support in securing a peace settlementreuters.comreuters.com. Ukraine’s parliament backed this course, issuing a statement that described U.S. President Trump’s peace efforts as “decisive” for ending the warreuters.com.
• Tense U.S.-Ukraine Dialogue: These statements came just days after a contentious White House meeting between Zelenskiy and Trump. That encounter devolved into acrimonious exchanges, and afterward Trump suggested his “patience was running out” with Ukraine’s leadershipreuters.com. An Associated Press report had quoted Zelenskiy saying the war’s end was “very, very far away,” which drew Trump’s irereuters.com. Since then, Zelenskiy has gone out of his way to affirm that ties with Washington remain a top priorityreuters.com, underscoring how crucial U.S. backing is to Kyiv’s strategy.
• European Involvement: Over the past weekend, European allies met in London to draft a framework for a potential settlementreuters.com. Zelenskiy consulted with EU/NATO partners (including a call with Baltic leaders) and reiterated that “security guarantees” for Ukraine must be part of any peace dealreuters.comreuters.com. European governments continue to support Ukraine’s defense, but there is a growing recognition that a credible peace process might be necessary if U.S. support wanes.
• Conflict Status: On the ground, fighting remains stalemated along much of the front. Russian forces control parts of eastern Ukraine, and daily hostilities continue, though no major offensives have been reported in recent days (consistent with winter lulls in prior years). Civilian areas face intermittent shelling. Zelenskiy’s remark that the war’s end is distant reflects the harsh reality that neither side has achieved a decisive breakthrough.

Analysis:
Drivers for Ukraine’s diplomatic initiative include war fatigue, economic strain, and uncertainty about ongoing Western aid. After three years of conflict, Kyiv likely perceives that maintaining Western unity is getting harder – especially given signals from Washington. The Trump administration’s stance marks a departure from the previous U.S. policy; it appears driven by a desire to reduce U.S. entanglement abroad and possibly secure a quick foreign policy “win” by brokering a deal. Motivations on the U.S. side could range from genuine concern over prolonged war costs to domestic political calculus (appeasing an American electorate wary of overseas spending). Ukraine, in response, is trying to lock in commitments from allies and push for “real security guarantees,” such as defense pacts or peacekeeper deployments, to prevent any settlement from merely pausing the conflictreuters.com.

In the short term, there is a high likelihood of intensified diplomatic activity – expect shuttle diplomacy involving U.S., European, and possibly Russian interlocutors. Alternative hypotheses should be considered: one is that Trump’s tough talk is a negotiation tactic to pressure Ukraine into concessions (e.g., ceding some territory or accepting a ceasefire), while still intending to maintain some level of support. Another possibility is that Russia may sense an opening if U.S.-Ukraine tensions grow, and could stall or harden its own position, betting on Western resolve fracturing (indeed, Russian officials have historically tried to exploit such rifts). In the long term, the conflict’s trajectory hinges on U.S. policy. If Washington significantly curtails aid (which is possible within months, though not certain), Ukraine’s military capability would erode, making a negotiated outcome almost inevitable by late 2025. Conversely, if the U.S. clarifies its commitment soon (e.g., by tying aid to progress in talks rather than an open-ended guarantee), Ukraine might be emboldened to hold its lines until after political transitions (like the 2025 U.S. inauguration) – an outcome that keeps the war going but at reduced intensity (this scenario is moderately likely if diplomacy stalls). Confidence/uncertainty: It remains unclear how far the Trump administration is willing to go in pressuring Ukraine; internal U.S. politics or Russian actions (such as a new offensive or atrocity) could rapidly swing U.S. public opinion and policy back toward support. Thus, while a push for peace is underway, we assess an outright comprehensive peace agreement in the next few weeks as unlikely, but a temporary ceasefire or framework deal could emerge with medium likelihood if U.S. pressure continues.

Implications:
For business and markets, the prospect of peace talks offers cautious optimism: a de-escalation in Ukraine would likely stabilize European energy and grain markets (the war’s continuation has kept risks of supply shocks priced in). If diplomacy gains traction, expect downward pressure on global oil and gas prices (likely) and improved investor confidence in Europe. However, if U.S.-Ukraine tensions lead to a pullback of support without a peace deal, there’s a risk of conflict escalation or a humanitarian crisis that could jolt markets in the opposite direction (e.g., if Ukraine’s position deteriorates suddenly). Policy implications: European NATO members may need to step up defense aid (and financial aid) to Ukraine to compensate for any U.S. shortfall – a scenario already being discussed in European capitals (with moderate likelihood of implementation). For the U.S., a reduced role could free up resources but might also diminish U.S. influence in Europe and embolden rival powers, which in turn can affect global stability and U.S. security interests (a trade-off policymakers are actively weighing). Security impacts: In Ukraine, any ceasefire or peace arrangement will need robust monitoring; if “real security guarantees” (such as an international peacekeeping mission or fast-track NATO admission) are absent, the agreement’s durability will be low (making renewed conflict likely within a few years – a pattern seen after the 2015 Minsk accords). Neighboring countries (Poland, Baltic states) are closely watching the U.S. posture; a perceived U.S. pullback might prompt them to bolster their own defenses and regional alliances.

Recommendations:

• Monitor Policy Signals: Organizations with interests in Eastern Europe should track U.S. and NATO statements. Given the fluid situation, use standard probability terminology in risk assessments (e.g., “likely reduction” in U.S. military aid) and update scenarios frequently. If U.S. support appears likely to drop, be prepared for increased volatility in regional markets (currency, sovereign bonds) and consider hedges or contingency plans for operations in Europe.
• Engage in Scenario Planning: Corporate security and strategy teams should develop contingency plans for multiple outcomes: (1) a negotiated ceasefire/peace in the next 1–2 quarters (leading to potential opportunities in rebuilding Ukraine’s economy, but also watch for sanctions shifts if some are lifted as part of a deal); (2) a protracted stalemate with reduced U.S. involvement (heightened long-term uncertainty in Eastern Europe); and (3) an unforeseen escalation (e.g., if Russia attempts a new offensive while perceiving U.S. hesitation – low probability but high impact). Each scenario carries distinct risks and opportunities for industries like energy, defense, and agriculture.
• Stakeholder Outreach: Businesses, especially in Europe, may consider quiet diplomacy via industry coalitions to advocate for stable outcomes – for instance, supporting international frameworks that ensure Ukraine’s reconstruction and security (which in turn would create a stable environment for investment). Multinationals can use their influence to encourage a peace process that includes economic security measures, such as war risk insurance or development funds, which would reduce investment risk if peace takes hold.
• Security Posture Adjustments: Companies operating in Ukraine or nearby should maintain an agile security posture. In anticipation of potential ceasefire lines or new border arrangements, be ready to adjust supply routes and personnel safety measures. Conversely, if talks falter and fighting surges, have plans to protect staff and assets (evacuation plans, alternative logistics). Remain aware that the situation carries significant uncertainty – any recommendation should be revisited if key assumptions (like U.S. support levels or Russian intentions) change.

3. Cyberattack Disrupts Global Manufacturer – Supply Chain Threat (48 hours)

Headline: Global manufacturing firm Adval Tech hit by cyberattack (March 2–3, 2025), causing worldwide IT shutdown and highlighting escalating cyber risks to industry.

Key Intelligence:

• Major Industrial Cyber Breach: Adval Tech Group, a Swiss-based automotive and industrial components manufacturer, suffered a significant cyberattack on the night of March 1–2ecrime.ch. The attack targeted the company’s IT systems across all international sites. In response, all IT systems were immediately shut down globally as an emergency precautionecrime.ch. This preemptive containment measure was confirmed in an official ad-hoc disclosure on March 3, which noted the seriousness of the breach while initial details on the damage remained limitedwebdisclosure.com.

• Operational Impact: The forced IT shutdown caused production interruptions at multiple factories. Adval Tech operates production facilities in Switzerland, Germany, Hungary, China, Malaysia, Mexico, and Brazilwatson.ch, and the attack effectively paralyzed digital operations across these sites. The company warned of ongoing disruptions as teams work to restore systemswatson.ch. It is collaborating with internal and external cybersecurity experts and authorities “under high pressure” to resume normal businesswatson.ch. Early indications suggest a ransomware attack is likely (given the global shutdown pattern), though the company has not publicly confirmed the attack type or perpetrators yet.

• Market and Stakeholder Reaction: Adval Tech’s stock price fell nearly 3% on March 3 upon news of the cyberattack and operational haltfinanzen.ch, reflecting investor concern. Customers in the automotive sector are on alert for possible supply delays if the outage is prolonged. Swiss authorities have been notified, and no other companies have reported related incidents, suggesting this was a targeted attack on Adval Tech rather than a wider systemic event. Separately, within the same 24-hour window, Poland’s Space Agency and a Singaporean public organization reported cyber incidentsecrime.checrime.ch, underscoring a broader uptick in attacks this week (though those appear unrelated and in different sectors).

• Threat Context: Manufacturing companies have become prime targets for cybercriminals. Industry reports note that the manufacturing sector was the most targeted by ransomware in late 2024securitybrief.cadarkreading.com. Attackers are drawn by the high impact of disrupting production lines – which can pressure firms to pay ransoms quickly. Adval Tech itself experienced a previous data breach in 2023 via a third-party software vulnerabilitycybersecuritydive.com, claimed by the Cl0p ransomware gang. The current attack’s global scale suggests a capable adversary (possibly a ransomware group using sophisticated malware to propagate across the network). There is no indication yet of whether sensitive data (e.g. intellectual property or client data) was stolen, but incident response is ongoing.

Analysis:
This incident is indicative of growing cyber threats to critical supply chains. Drivers for such attacks include financial gain (ransomware crews seeking payouts) and potentially strategic intent (in cases where state-sponsored actors might disrupt industries). In Adval Tech’s case, the timing (overnight on a weekend) and immediate global impact align with ransomware tactics, where attackers deploy payloads during off-hours to maximize damage. Short-term risks are centered on operational downtime: it is highly likely the company will experience several days, if not weeks, of reduced capacity while systems are cleaned and restored. This not only hits Adval Tech’s revenue but could ripple to its automotive OEM clients if supply of parts is interrupted. Longer-term risks include loss of trust and competitive disadvantage if proprietary information was stolen (e.g., product designs or pricing data) – that data could be leaked or sold, benefiting competitors or causing legal liabilities. An alternative hypothesis is that this attack might not be purely criminal; given Adval Tech’s presence in multiple countries, one could speculate about a state-sponsored actor testing supply chain vulnerabilities (for instance, if Adval Tech supplies defense or critical sectors). However, current evidence (including the lack of broader geopolitical context and the known targeting of manufacturing by profit-motivated groups) makes a criminal ransomware motive more likely.

Implications:
For business operations, this event highlights that even mid-sized industrial firms can be global single points of failure: one successful breach cascaded across continents. Companies in manufacturing and logistics should consider it likely that similar attacks will occur, and the impact can be immediate worldwide outages. Supply chain managers at downstream companies (e.g., auto manufacturers using Adval Tech components) should anticipate potential delays and may need to source alternate parts if disruptions persist beyond a few days (the probability of a week-plus outage is moderate, depending on backup effectiveness and whether decryption keys are obtained if ransomware is confirmed). Policy and security: Governments may increase warnings to critical manufacturing firms to harden their systems. We assess with high confidence that regulatory scrutiny (like required cyber audits or incident reporting) on supply chain cybersecurity will intensify if such attacks continue. Financial impact: Beyond the immediate stock dip, there could be insurance implications – cyber insurers will look at this as evidence that manufacturing downtime claims (business interruption) are a major risk, potentially driving up cyber insurance premiums for the sector. If ransom was paid (no public info yet), that could encourage further attacks, whereas refusal to pay could lead to data dumps; both scenarios carry different implications (payment – short-term fix but fuels criminals; no payment – longer downtime and possible data leaks). Reputation: Adval Tech’s handling of this crisis (transparency and recovery speed) will set a precedent. A swift, effective recovery would demonstrate resilience (mitigating client concern), while a protracted struggle or poor communication could lose customer confidence. Given trends, it is highly likely that threat actors will keep targeting manufacturing, so this event may be one of many – putting entire industry segments on notice.

Recommendations:

• Incident Response and Continuity: Companies in manufacturing and critical infrastructure should review and drill their incident response plans. Ensure that operational technology (OT) networks have isolation capabilities so a breach in IT systems can be contained. Regular backups must be offline and secure so that, as in Adval Tech’s case, a global shutdown can be followed by restoration without paying ransom. Conducting an exercise imagining a “total IT blackout” scenario can improve preparedness.
• Supply Chain Resilience: Downstream businesses (clients of firms like Adval Tech) should map their supply chains for cyber risk. Identify key suppliers and inquire about their cybersecurity measures and recovery plans. It may be prudent to hold some safety stock of critical components or diversify suppliers for high-risk single-source parts. Where possible, collaborate with suppliers on joint cyber defense strategies (e.g., sharing threat intelligence). (If new information emerges that the Adval Tech breach is linked to a broader campaign, adjust supply chain risk assessments accordingly.)
• Cybersecurity Enhancements: All organizations, especially those in manufacturing, should adopt a multilayered cyber defense. This includes up-to-date endpoint detection and response (EDR) tools, network monitoring for lateral movement, and strict network segmentation (separating plant floor systems from corporate networks). Given that many attacks exploit known vulnerabilities, aggressively reduce your “time to patch” for both IT and industrial control systems – CISA’s recent addition of exploited vulnerabilities to its catalogcisa.gov is a good starting point for priority patching.
• Stakeholder Communication: In the event of an incident, transparent communication is key. Adval Tech’s quick public disclosure helped stakeholders take action (clients could activate contingency plans). We recommend establishing clear communication protocols (who informs customers, regulators, and when). Additionally, evaluate cyber insurance coverage for business interruption – ensure it is adequate and understand the conditions (some policies require notification within a short time frame of an incident).
• Monitoring and Threat Intelligence: Stay informed on threat actor trends. Subscribe to intelligence feeds (like ISACs for manufacturing) that can provide early warning of techniques observed (e.g., a bulletin on a new ransomware strain). The emergence of new hacker groups in 2025, such as RansomHub and othersthehackernews.com, means the threat landscape is evolving. It is likely that these groups share tactics on dark web forums; consider threat hunting on your network for indicators associated with known campaigns (for example, scanning for the specific malware signatures reported in recent incidents). Implementing these recommendations will materially reduce risk, but they should be continuously revisited. Cyber threats are dynamic, and what is “likely” today can change with new intelligence – maintain agility in your cybersecurity strategy.

Historical Context

• Trade Tensions and Precedents: The current tariff conflict echoes the 2018–2019 U.S.-China trade war, but now involves U.S. allies Canada and Mexico on an unprecedented scale. Markets were initially caught off guard; as recently as March 3, many on Wall Street underestimated Trump’s tariff resolveatlanticcouncil.org. His administration’s stance had been telegraphed for weeks – in February, U.S. officials publicly warned of tariffs over fentanyl, and the Atlantic Council predicted implementationatlanticcouncil.org. Historically, such trade wars tend to drag on (the U.S.-China dispute lasted over a year) and often result in persistent higher prices and disrupted supply chains. Prior to this week’s escalation, North American trade relations had been stable under the USMCA agreement; this sudden shift is a break from trend. Unless a diplomatic breakthrough occurs, the pattern of tit-for-tat tariffs is likely to continue, given that similar past disputes only resolved after prolonged negotiation and economic pain.

• Ukraine Conflict Evolution: Russia’s full-scale invasion of Ukraine in February 2022 set off the largest conflict in Europe since WWII. Over 2023 and 2024, the war became a grinding stalemate, with Ukraine mounting successful counteroffensives but not dislodging Russia completely. U.S. and NATO military aid has been a decisive factor in preventing Ukraine’s defeat. However, the start of 2025 brought a political shift in Washington with the new U.S. administration expressing skepticism about “endless wars.” This contrasts with the prior high-probability assumption (under the previous administration) that U.S. support would remain strong through Ukraine’s planned 2025 offensive. Now that assumption is in question. Still, European allies have increased their commitments, and Russia’s ability to advance has been blunted, indicating the war will likely continue at a lower intensity if peace talks falter (as of early 2025, neither side appears capable of a decisive military victory, a status quo that is likely (55–70% chance) to persist absent external changes). Past ceasefire attempts (Minsk agreements of 2015) collapsed due to lack of enforcement mechanisms – that historical lesson informs Ukraine’s insistence on concrete security guarantees this time.

• Cyber Threat Trends: The attack on Adval Tech is part of an ongoing pattern of ransomware and cyber assaults on critical industries. In 2024, there was a surge of high-profile attacks: for example, a major U.S. pipeline operator and several automotive suppliers were hit, causing multi-day shutdowns. Data from cybersecurity firms Dragos and CrowdStrike in late 2024 showed an 87% increase in ransomware attacks on industrial sector targets year-on-yearsecuritybrief.ca. Manufacturing overtook healthcare as the top-targeted industry by cybercriminals, with over 400 reported ransomware incidents in that sector in 2024securitybrief.ca. This trend is attributed to the perceived higher likelihood of ransom payout when production is at stake. The trend stability is high – threat actors continue to refine techniques like supply chain compromise and use of zero-day exploits (e.g., the 2023 breach of Adval Tech via a Fortra software vulnerabilitycybersecuritydive.com). It is highly likely (around 80% confidence) that such attacks will remain frequent or increase in 2025, especially if geopolitical tensions provide cover or additional motives for state-aligned hackers to target industrial bases.

• AI Governance Developments: Key events prior to the last 48 hours set the stage for current AI policy moves. In October 2023, the previous U.S. administration issued Executive Order 14110, establishing rigorous AI development guidelines (transparency, auditing, etc.). However, on January 20, 2025, the new administration revoked EO 14110, signaling a major policy shift away from prescriptive regulationnatlawreview.com. This was followed on Feb 6, 2025 by a Request for Information to shape a new “AI Action Plan,” reflecting a preference for stakeholder input and a lighter regulatory touchnatlawreview.compymnts.com. Meanwhile, the EU has been working on the AI Act since 2021; the related AI Liability Directive, proposed in 2022 to make it easier for victims to sue for AI harms, was taken off the 2025 EU agenda due to slow progress and lobbying pressurepymnts.com. Lawmakers like Axel Voss criticized this U-turn, indicating continuing debate within the EUpymnts.com. Trend: Western AI governance is currently characterized by caution and consultation rather than immediate strict rules – a trend that is likely to continue in the near term. However, history shows regulation can swing quickly if a catalyzing incident occurs (e.g., a major AI failure or scandal could prompt renewed calls for liability laws). Companies should thus note that the present regulatory lull may not last beyond 2025 (probability of significant AI regulation by late 2025 is moderate, perhaps ~50%, contingent on how these policy discussions evolve and whether any AI-related harm captures public attention).

Watchlist (Next 1–2 Weeks)

• Further Trade Escalation or Talks: Monitor March 9 when Mexico’s government will announce its retaliation to U.S. tariffsreuters.com. This event is likely to set the tone for whether the trade war intensifies. Also watch for any U.S. moves toward the planned April 2 “reciprocal tariffs” on other trading partnersreuters.com – preparations for that could roil markets. A high-level diplomatic engagement (or backchannel talks) between the U.S., Canada, and Mexico is possible if economic pressures rise (even chance); any hint of negotiations would be market-positive.

• Ukraine Peace Efforts and U.S. Aid Decisions: The coming days will reveal if the U.S. administration takes concrete steps regarding Ukraine – e.g. a statement on aid limits or an envoy for peace talks. Probable developments include increased European diplomatic activity to keep the U.S. engaged (for instance, a joint UK-French initiative). If no progress, there is a risk (likely around 60%) that the rhetoric between U.S. and Ukrainian leaders could sharpen, which would negatively affect war morale and could spur Russia to test lines. Keep an eye on March 7–8: NATO defense ministers meet informally and could produce signals on filling any gap left by the U.S.

• Cyber Threats – Ongoing Fallout and New Targets: Adval Tech’s recovery timeline (whether systems stay down into next week) will be a key indicator of attack severity; a prolonged outage might hint at either significant damage or negotiation with attackers. It’s highly likely we’ll learn the attack’s attribution soon (via cybersecurity firm analysis or a ransomware gang claiming responsibility). Additionally, watch for copycat attacks: threat intel suggests some groups coordinate attacks in clusters. Critical suppliers in automotive, aerospace, and pharmaceuticals should be on high alert in the next two weeks. CISA and other agencies may release advisories – heed any emergency patch notifications (e.g., if a vulnerability is found to have facilitated this attack).

• AI Policy Updates and Industry Responses: The U.S. OSTP’s public comment period on the AI Action Plan closes on March 15, 2025pymnts.com. In the next two weeks, anticipate a flurry of input from tech companies, academia, and civil society. Notably, any public statements by major AI firms or lobbying groups at the deadline could signal the direction of U.S. AI policy (e.g., calls for self-regulation vs. legislation). In the EU, keep an eye on the European Parliament’s reaction to the Commission’s withdrawal of the AI Liability Directive – by mid-March they might propose alternative ways to address AI accountability. Probability: It is likely (around 70%) that no dramatic regulation will appear in the immediate term, but stakeholders’ positions now will shape formal proposals later this year.

• Other Geopolitical Flashpoints: Outside the main focus areas, a few simmering issues warrant attention. Iran-Israel tensions remain high (recent reports of Iran revising air defenses after Israeli strikesunderstandingwar.org), and there is a low but non-negligible chance (<20%) of a sudden incident (e.g., proxy clash in Syria) in the coming weeks. In Asia, any Chinese military activity near Taiwan or the South China Sea around the upcoming annual political meetings in Beijing could affect global risk sentiment (historically, March sees increased rhetoric during China’s National People’s Congress – worth watching, even if major action is unlikely). These items could compound or shift global risk priorities on short notice.

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